Good morning, Chairman Rajotte and finance committee members. Thank you for the opportunity to present to you today.
The Ontario Funeral Service Association represents over 220 independent family funeral homes in Ontario. We are here today to highlight the preferential tax treatment enjoyed by our competitors, the religious cemeteries in Ontario, due to their charitable status. This issue may be further magnified when the Ontario provincial sales tax is harmonized with the goods and services tax in July 2010.
The formal position of our association is as follows: All providers of funeral goods and services, regardless of their corporate structure, will be required to levy the GST in a uniform fashion when providing goods and services to the public. The OFSA wrote the Minister of Finance in the spring of 2008, and the minister's response was positive. The minister's letter stated: “Burial and cremation services are not currently among the particular services to which the exception from the exempt status for charities applies.” In other words, if you provide burial and cremation services, you should apply GST.
Despite these assurance, we have significant concerns. During follow-up discussions with the minister's office, officials recommended that our issue be brought before the pre-budget consultations in 2009. We followed this advice and made a submission to the pre-budget consultations, but have not had a satisfactory resolution. Since then, we have reinitiated dialogue with the minister's office and are awaiting a response.
We would like to bring to your attention a brochure produced by our competitors highlighting the savings on the GST their clients received by using their services. It says, “Save the GST on select service fees”, including burial, entombment, cremation, and hydro. The minister’s letter also states that “the application of the GST is regularly reviewed and your comments will be taken into consideration”. We offer the federal government our experience in dealing with this inequity as part of the GST review.
The GST exemption for our competitors coupled with the harmonization of the Ontario provincial sales tax gives religious cemeteries a significant and unfair competitive advantage. The inherent unfairness undermines the marketplace and ultimately is unhelpful to consumers in their time of need.
In terms of how this relates to the theme of this year's pre-budget consultations, we are of the opinion that tax fairness is the ultimate tax and program measure. If taxes are administered unfairly, then it undermines our tax system and the economy.
Thank you all for your time today.